BUSINESS DECISION: COMPETING BANKS You are the accounting manager for Kool Ragz, Inc., a manufacturer of men's and women's clothing. The company needs to borrow $1,720,000 for 80 days in order to purchase a large quantity of material at "closeout" prices. The interest rate for such loans at your bank, Rimrock Bank, is 9% using ordinary interest. a. What is the amount of interest on this loan? Round your answer to the nearest cent. b. After making a few "shopping" calls, you find that Southside National Bank will lend at 9% using exact interest. What is the amount of interest on this offer? Round your answer to the nearest cent. $ c. So that you can keep your business, Rimrock Bank has offered a loan at 8.3% using ordinary interest. What is the amount of interest on this offer? Round your answer to the nearest cent. $ d. (Challenge) If Southside National wants to beat Rimrock's last offer (part c) by charging $1,100 less interest, what rate, rounded to the nearest hundredths of a percent, must it quote using exact interest? Do not enter the percent symbol in your answer. Do not round intermediate calculations. %
BUSINESS DECISION: COMPETING BANKS You are the accounting manager for Kool Ragz, Inc., a manufacturer of men's and women's clothing. The company needs to borrow $1,720,000 for 80 days in order to purchase a large quantity of material at "closeout" prices. The interest rate for such loans at your bank, Rimrock Bank, is 9% using ordinary interest. a. What is the amount of interest on this loan? Round your answer to the nearest cent. b. After making a few "shopping" calls, you find that Southside National Bank will lend at 9% using exact interest. What is the amount of interest on this offer? Round your answer to the nearest cent. $ c. So that you can keep your business, Rimrock Bank has offered a loan at 8.3% using ordinary interest. What is the amount of interest on this offer? Round your answer to the nearest cent. $ d. (Challenge) If Southside National wants to beat Rimrock's last offer (part c) by charging $1,100 less interest, what rate, rounded to the nearest hundredths of a percent, must it quote using exact interest? Do not enter the percent symbol in your answer. Do not round intermediate calculations. %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Transcribed Image Text:BUSINESS DECISION: COMPETING BANKS
You are the accounting manager for Kool Ragz, Inc., a manufacturer of men's and women's clothing. The company needs to borrow $1,720,000 for 80 days in order to purchase a large quantity of material at "closeout"
prices. The interest rate for such loans at your bank, Rimrock Bank, is 9% using ordinary interest.
a. What is the amount of interest on this loan? Round your answer to the nearest cent.
b. After making a few "shopping" calls, you find that Southside National Bank will lend at 9% using exact interest. What is the amount of interest on this offer? Round your answer to the nearest cent.
$
c. So that you can keep your business, Rimrock Bank has offered a loan at 8.3% using ordinary interest. What is the amount of interest on this offer? Round your answer to the nearest cent.
$
d. (Challenge) If Southside National wants to beat Rimrock's last offer (part c) by charging $1,100 less interest, what rate, rounded to the nearest hundredths of a percent, must it quote using exact interest?
Do not enter the percent symbol in your answer. Do not round intermediate calculations.
%
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